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Dr. Frederick Frankenstein (Gene Wilder) is a lecturing physician at an American medical school and engaged to the tightly wound socialite Elizabeth (Madeline Kahn). He becomes exasperated when anyone brings up the subject of his grandfather, the infamous mad scientist. To dissociate himself from his forebear, Frederick insists that his surname is pronounced "Fronkensteen."

When a solicitor informs him that he has inherited his family's estate in Transylvania after the death of his great-grandfather, the Baron Beaufort von Frankenstein, Frederick travels to Europe to inspect the property. At the Transylvania train station, he is met by a hunchbacked, bug-eyed servant named Igor (Marty Feldman) who, irritated by Frederick's pronunciation of Frankenstein, insists that his own name is pronounced "Eye-gor", and a lovely young personal assistant named Inga (Teri Garr).

Upon arrival at the estate, Frederick meets the forbidding housekeeper Frau Blücher (Cloris Leachman), whose name, whenever spoken, causes horses to rear up and neigh madly in fright. Though his family legacy has brought shame and ridicule, Frederick becomes increasingly intrigued about his grandfather's work after discovering the secret entrance to his grandfather's laboratory.

Upon reading his grandfather's private journals, Frederick is so captivated that he decides to resume his grandfather's experiments in re-animating the dead. He and Igor steal the corpse of a recently executed criminal, and Frederick sets to work experimenting on the large corpse. Matters go awry when Igor is sent to steal the brain of a deceased revered historian, Hans Delbrück; startled by lightning, he drops and ruins Delbrück's brain. Taking a second brain, Igor returns with a brain labeled "Do Not Use This Brain! Abnormal", which Frederick unknowingly transplants into the corpse.

Soon, Frederick is ready to re-animate his creature (Peter Boyle), who is elevated on a platform to the roof of the laboratory during a lightning storm. Eventually, electrical charges bring the creature to life. The creature makes its first halting steps, but, frightened by Igor lighting a match, he attacks Frederick and must be sedated. Upon being asked whose brain was obtained, Igor confesses that the brain he supplied belonged to "Abby Normal" ("Abnormal"), angering Frederick and he chokes him.

The townspeople are uneasy at the possibility of Frederick continuing his grandfather's work. Most concerned is Inspector Kemp (Kenneth Mars), a one-eyed police official with a prosthetic arm and a thick German accent. Kemp visits the doctor and subsequently demands assurance that he will not create another monster. Upon returning to the lab, Frederick discovers that Frau Blücher is setting the creature free. After she reveals the monster's love of violin music and her own romantic relationship with Frederick's grandfather, the creature is enraged by sparks from a thrown switch and escapes from the Frankenstein castle.

While roaming the countryside, the Monster has frustrating encounters with a young girl and a blind hermit (Gene Hackman). Frederick recaptures the monster and locks the two of them in a room, where he calms the monster's homicidal tendencies with flattery and fully acknowledges his own heritage, shouting out emphatically, "My name is Frankenstein!".

Frederick offers the sight of "The Creature" following simple commands to a theater full of illustrious guests. The demonstration continues with Frederick and the monster launching into the musical number "Puttin' On the Ritz," complete with top hats and tails. The routine ends disastrously when a stage light explodes and frightens the monster, who becomes enraged and charges into the audience, where he is captured and chained by police. Back in the laboratory, Inga attempts to comfort Frederick and the two wind up sleeping together on the suspended reanimation table.

The monster escapes with Elizabeth when she arrives unexpectedly for a visit. Elizabeth falls in love with the creature due to his inhuman stamina and his enormous penis (referred to as Schwanstuker or Schwanzstück). The townspeople hunt for the monster. Desperate to get the creature back, Frederick plays the violin to lure his creation back to the castle. Just as the Kemp-led mob storms the laboratory, Frankenstein transfers some of his stabilizing intellect to the creature who, as a result, is able to reason with and placate the mob.

Elizabeth marries the now erudite and sophisticated monster—with her hair styled identically to that of the female creature from the Bride of Frankenstein, while Inga joyfully learns what her new husband Frederick got in return during the transfer procedure—the monster's Schwanzstücker.

Wilder had played around with screenwriting earlier in his career, writing a few unmade screenplays that were, by his own admission, not very good (the story idea of one of those early screenplays would form the basis of his 2007 novel My French Whore.) While writing his story, he was approached by his agent (and future film mogul) Mike Medavoy who suggested he make a film with Medavoy's two new clients, actor Peter Boyle and comedian Marty Feldman. Wilder mentioned his Frankenstein idea, and within a few days, sent Medavoy four pages of his idea (the entire Transylvania train station scene, which he had started writing after seeing Feldman on Dean Martin's Comedy World.)

It was Medavoy who suggested that Wilder talk to Mel Brooks about directing. Wilder had already talked to Brooks about the idea early on. After he wrote the two-page scenario, he called Brooks, who told him that it seemed like a "cute" idea but showed little interest.[9] Though Wilder believed that Brooks would not direct a film that he did not conceive, he again approached Brooks a few months later, when the two of them were shooting Blazing Saddles.

I was in the middle of shooting the last few weeks of Blazing Saddles somewhere in the Antelope Valley, and Gene Wilder and I were having a cup of coffee and he said, I have this idea that there could be another Frankenstein. I said not another — we've had the son of, the cousin of, the brother-in-law, we don't need another Frankenstein. His idea was very simple: What if the grandson of Dr. Frankenstein wanted nothing to do with the family whatsoever. He was ashamed of those wackos. I said, "That's funny."

In a 2016 interview with Creative Screenwriting, Brooks elaborated on the writing process. He recalled,

"Little by little, every night, Gene and I met at his bungalow at the Bel Air Hotel. We ordered a pot of Earl Grey tea coupled with a container of cream and a small kettle of brown sugar cubes. To go with it we had a pack of British digestive biscuits. And step-by-step, ever so cautiously, we proceeded on a dark narrow twisting path to the eventual screenplay in which good sense and caution are thrown out the window and madness ensues."[11]

Unlike his previous and subsequent films, Brooks did not appear onscreen as himself in Young Frankenstein, though he recorded several voice parts and portrayed a German villager in one short scene. In 2012, Brooks explained why:

"I wasn't allowed to be in it. That was the deal Gene Wilder had. He [said], "If you're not in it, I'll do it." [Laughs.] He [said], "You have a way of breaking the fourth wall, whether you want to or not. I just want to keep it. I don't want too much to be, you know, a wink at the audience. I love the script." He wrote the script with me. That was the deal. So I wasn't in it, and he did it."[12]

Mel Brooks wanted at least $2.3 million dedicated to the budget, whereas Columbia Pictures decided that $1.7 million had to be enough. Brooks instead went to 20th Century Fox for distribution, after they agreed to a higher budget. Fox would later sign both Wilder and Brooks to five year contracts at the studio.

While shooting, the cast ad-libbed several jokes used in the film. Cloris Leachman improvised a scene in which Frau Blücher offers "varm milk" and Ovaltine to Dr. Frankenstein, while Marty Feldman surreptitiously moved his character's hump from shoulder to shoulder until someone noticed it, and the gag was added to the film, as "Didn't you used to have that on the other side?", and the response "What hump?".[citation needed]

In one of the scenes of a village assembly, one of the authority figures says that they already know what Frankenstein is up to based on five previous experiences. On the DVD commentary track, Mel Brooks says this is a reference to the first five Universal films. In the Gene Wilder DVD interview, he says the film is based on Frankenstein (1931), Bride of Frankenstein (1935), Son of Frankenstein (1939) and The Ghost of Frankenstein (1942).

Young Frankenstein was first released onto DVD November 3, 1998.[13] The film was released onto DVD the second time on September 5, 2006.[14] The film then released on DVD the third time on September 9, 2014 as a 40th anniversary edition along with the Blu-ray.[15]

ABC Records released the soundtrack on LP on December 15, 1974. On April 29, 1997, One Way Records reissued it on CD. There are pieces of dialogue by the actors as well as background and incidental music on the disc. The LP and disc are now out of print and command a very high price on Internet auction sites when available.